Brokerage firm Charles Schwab is in talks to buy rival TD Ameritrade, reports CNBC. The organization cites a source who said the deal could be announced today. The two brokerage firms are the largest publicly traded houses, with Charles Schwab having a market cap of $57.5 billion and TD Ameritrade at $22.4 billion.
The retail brokerage industry has gone through upheaval in recent months as all of the major brokers have moved, or are moving, to commission-free trades in order to lure customers. CNBC says Charles Schwab was the first to do so, followed by TD Ameritrade.
The change has forced brokerage houses to try to find new ways to keep profits up, and combining the two biggest brokerage firms could help the companies compete against others, like Fidelity, that offer the same benefits to consumers.
Upon news breaking of the rumored imminent announcement, CNBC says TD Ameritrade shares surged over 20%, with Charles Schwab shares up over 5%. If the two firms do merge, they would have a combined $5 trillion in assets.